For the CBD market to thrive, it requires clear regulatory framework, a supportive government and strong consumer demand. All three have aligned in the UK this year. From a regulatory and government perspective, signals from the Food Standards Agency (FSA) and the Home Office are increasingly positive. While rightly making consumer safety the top priority, they seem to be putting consumer choice and the desire to support the development of the UK industry in a firm joint second.
According to an article by Tony Reeves in the The Grocer, the final ingredient – consumer demand – is certainly there. As a ‘hero ingredient’, CBD has the potential to enhance multiple categories and formats. In the soft drinks industry, for example, it could in time match the £2bn energy drinks subcategory, representing over 5 percent of the sector’s value. Another growing area is supplements. During Covid, consumers have increased their focus on supplements and health-promoting ingredients, including those providing CBD as a main component.
Still, post-Brexit Britain presents fresh opportunities for creating a vibrant and growing CBD sector. Indeed, the Taskforce on Innovation Growth and Regulatory Reform states its primary objective is to “scope out and propose options for how the UK can take advantage of our newfound regulatory freedoms”, and will report to the prime minister this month.
Against this backdrop, the UK is uniquely placed to become a leading operator within the sector and is already viewed as a key market by manufacturers across Europe and North America. An attractive market has high barriers to entry but low barriers to growth. A sensible regulatory framework, quality standards and an increasingly educated customer base is building the entry barriers. And, for the brands that can comply and deliver, the market holds endless possibilities.